Cap-trade systems share link to California
Three-province deal moves idea of North American market closer
PARIS— Slowly but surely the idea of creating a continental market for carbon trading came closer to reality Monday after Ontario, Quebec and Manitoba inked an agreement to link up their cap-and-trade systems with California.
Ontario Premier Kathleen Wynne, who attended the start of the Paris conference, returned this week for a series of events focused on the role that subnational jurisdictions are playing in the fight against climate change. She was joined by Quebec Premier Philippe Couillard and Manitoba Premier Greg Selinger.
The three provincial leaders hosted an afternoon session where they signed a memorandum of understanding to permit carbon trading across their respective cap-and-trade systems as part the Western Climate Initiative. The Canadian trading bloc, once Manitoba and Ontario are up and running, would also link up with California, giving a boost to what is already North America’s largest carbon market.
The three provinces also agreed to harmonize how they track and measure greenhouse gas emissions and collaborate on climate adaptation efforts.
“Now we’re getting to the point where it’s pretty clear this is going to be a national reality,” Wynne said later in an interview. “The question is, the provinces that are not in, how are they going to interact with us and how are we going to act with each other?”
Five Canadian provinces — when also counting carbon tax policies in Alberta and British Columbia — now have some form of carbon pricing, representing 32.2 million Canadians, or 90 per cent of the population.
“We share the same conviction about the urgent need for action,” Couillard said at the ceremony.
Ontario’s Liberal government is doubling down on its efforts to green the province, following its complete phase-out of coal-fired power generation. Early next year, full details of the province’s new climate plan will be released. Wynne said in addition to the cap-and-trade plan, the focus is on decarbonizing transportation and buildings.
The premier’s return to Paris comes less than a week after auditor general Bonnie Lysyk skewered the province for what she felt was wasted money on green electricity generation. Asked whether she thought Lysyk crossed the line last week when she criticized the government’s electricity policy, Wynne tried hard not to pass judgment — but then she kind of did.
“I’ll just say we made a decision as a government, which is a policy decision in the context of needing to reduce greenhouse gas emissions, and quite frankly, needing to jump-start an industry,” the premier said.
“It’s her job to critique the methodologies, but it’s our job to set the policy and take the province in the directions we believe are more sustainable.”
So did Lysyk stick with methodology?
“I’m not going to make that judgment, but I will say, and this is a fact, she was commenting on policy as well as critiquing implementation and value for money. So that is what it is.”
Lysyk’s report questioned the Liberal government’s use of directives to help phase out coal-fired generation through a series of initiatives, including creation of a feed-in-tariff program that over a 20-year term pays “significantly more attractive contract prices” to generators of wind and solar power.
That program, she concluded, will result in electricity consumers paying $9.2 billion more than they would have if the province had stuck with its previous competitive procurement process, though the Independent Electricity System Operator pegs the number at $5.3 billion.
Tim Gray, executive director of Environmental Defence, said the auditor general’s report was off-balance not just for what it said, but what it left out.
It neglected to mention several public-policy objectives of the feedin-tariff program, including job creation and the goal of democratizing access to a grid, he said. The program, he added, was intentionally designed to make it easier and less costly for small generators of clean electricity — from farmers and First Nations to homeowners and businesses — to participate in an electricity system dominated by large, deep-pocketed companies.
“Also missing from all this analysis is the fact that Ontario’s renewable energy program was instrumental in the coal phase-out, which was justified because the coal plants were estimated to cost $4.4 billion in health and environmental costs each year,” Gray said. “Five billion dollars in extra costs over 20 years to avoid $4.4 billion per year sounds like good value to me. Of course, there is also the tiny bonus of clear blue skies and smog-free summers.”
This article is part of a series produced in partnership by the Toronto Star and Tides Canada to address a range of pressing climate issues in Canada leading up to the United Nations Climate Change Conference in Paris, December 2015. Tides Canada is supporting this partnership to increase public awareness and dialogue around the impacts of climate change on Canada’s economy and communities. the Toronto Star has full editorial control and responsibility to ensure stories are rigorously edited in order to meet its editorial standards.